Salary Sacrifice Car Parking Scheme

Structuring schemes that work for your business and your team

Car parking costs can add up quickly, especially in city centre locations. A well-designed salary sacrifice scheme can help businesses manage these costs more efficiently, while giving employees a clear and predictable way to pay for parking through their salary.

The rules for salary sacrifice changed in 2017, meaning parking benefits are now covered by HMRC’s Optional Remuneration Arrangements (OpRA). While these rules removed the blanket tax exemption, it’s still possible to structure parking arrangements in a way that delivers value for both the employer and employees.

How a compliant scheme can work

• The employer contracts directly with the parking provider, often negotiating a bulk or discounted rate.
• The employee sacrifices an agreed amount of gross salary, typically matching or slightly exceeding the employer’s cost.
• The taxable value is determined under OpRA — usually the higher of the sacrificed amount and the benefit cost — and this is reported on a P11D.
• Employer NIC is generally charged as Class 1A, and employee NIC may still be saved on the sacrificed salary.

When salary sacrifice for parking makes sense

Although the tax exemption that existed before 2017 no longer applies, salary sacrifice for parking can still work well in situations such as:

• Bulk or discounted parking arrangements where the employer pays less than the employee sacrifices.
• Businesses that want to centralise parking provision and simplify administration.
• Employees who prefer fixed deductions from gross pay, rather than arranging and paying for parking individually.
• Organisations looking to manage parking allocations fairly and transparently through payroll.

Key points to keep in mind

• The scheme must not take pay below National Minimum Wage.
• The parking contract should be in the employer’s name to secure the correct NIC treatment.
• All arrangements must be formally documented and reflected in payroll and benefits reporting.
• Transitional relief for pre-2017 schemes no longer applies, so new arrangements must follow current OpRA rules.

How we can help

We can help you design a fully compliant parking salary sacrifice scheme, covering:

• Scheme design and financial modelling
• Employer vs employee cost analysis
• Payroll and benefits reporting requirements
• Drafting the required employee agreements and communications

How we can help

We can help you design a fully compliant parking salary sacrifice scheme, covering:

• Scheme design and financial modelling
• Employer vs employee cost analysis
• Payroll and benefits reporting requirements
• Drafting the required employee agreements and communications

A practical way to manage parking costs — with the right structure

Professional salary sacrifice implementation

At Pulse Accountants, we provide a comprehensive service to help businesses implement and manage salary sacrifice schemes efficiently and compliantly.

What We Offer:

• Expert Consultation – We assess your business needs and help design a salary sacrifice scheme tailored to your workforce.
  
  
• Scheme Implementation – We manage the setup process, ensuring compliance with HMRC regulations.
  
  
• Employee Communication – We provide clear, professional communication to employees, ensuring they understand how salary sacrifice works and the benefits it offers.
  
  
• Ongoing Support – Our team is available to answer queries and provide ongoing administrative support.
  
  

Why choose Pulse?

With extensive experience in salary sacrifice schemes, we provide businesses with a seamless and fully compliant salary sacrifice solution. Our team ensures that both employers and employees understand the benefits and make the most of their opportunities.

Key Reasons to Work With Us:

✔ Industry Expertise – We have a deep understanding of salary sacrifice regulations.

✔ Tailored Solutions – We design bespoke schemes that align with your business and workforce needs.

✔ Compliance Assurance – We ensure full adherence to HMRC guidelines and workplace rules.

✔ Dedicated Support – Our team is available to provide ongoing assistance and ensure smooth implementation.